Study finds credit cards provide better fraud protection

WASHINGTON – With cash being used less frequently for everyday purchases, fraud is a legitimate concern for many consumers who swipe plastic at the checkout line.

A recent study published on CardHub.com researched the type of payment – debit or credit – that provides consumers with the best protection against fraud. Overall, the study found that credit cards are safest for shoppers.

“You are somewhat more at risk if you use a pin for your purchase,” says CardHub.com Senior Analyst John Kiernan.

But despite high-profile cases of credit card fraud, such as the instance when hackers broke through the firewalls of TJX Companies, Inc. to obtain account information, Kiernan says the risks of fraud are relatively small.

According to CardHub.com, consumers are not liable for unauthorized credit card transactions. However, liability for unauthorized debit card transactions depends on whether a PIN was used at the time of the purchase. The study reports that consumers are generally better protected from liability when they sign for a purchase, as opposed to using a PIN.